UK stocks end two days of currency-driven declines

LONDON, Jan 26 (Reuters) - British shares rose across the board on Friday as buyers returned to the market following two days of declines driven by a strengthening sterling.

The FTSE index dipped briefly after the pound rose on figures which showed an unexpected acceleration in British economic growth in the fourth quarter of 2017.

At 1037 GMT, the FTSE had recovered and was up 0.6 percent at 7,659.65 points with all sectors pointing higher and healthcare and financials contributing most to the index’s rise.

Online gambling firm GVC fell 5 percent, the top faller on the FTSE 250 index, after making a provision of about 200 million euros for a tax bill from Greek authorities.

Britain’s FTSE is the only major European index to have fallen (-0.4 percent) this year while others rallied, with France’s CAC 40 up 4 percent and Germany’s DAX gaining 3.2 percent, helped higher by a more marked pick-up in business activity on the continent and receding political risks.

Market analysts said the UK’s underperformance and a slightly weaker pound had prompted some opportunistic “dip buying” on Friday.

“You’ve actually had some downside momentum for the past few days,” said Chris Beauchamp at IG. “The number of stocks above their 20 and 50 day moving averages has been declining, but this usually signifies a buying opportunity, and that appears to be materialising this morning.”

Stark divisions with government over Brexit returned to the fore, with Finance minister Philip Hammond calling in Davos for Britain to remain closely aligned to the EU, drawing a rebuke from a source in Prime Minister Theresa May’s office.